Ledger Trial Balance and BRS

Example 1 : Simple Journal Entry

On 1st August 2013. goods are sold for cash Rs. 12,000.

Solution: :

Journal Entry

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

Cash A/c Dr.
2013 Aug, 1 To Sales A/c 12,000 12,000
(For Cash sales)

Ledge A/c

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013
To Sales A/c 12,000
Aug, 1

Sales A/c (extract)

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013
To Sales A/c 12,000
Aug, 1

Example 2: Compound Journal Entry

Received Rs. 14,000 in full settlement of a debt of Rs. 15,000 from Ram on Aug 8, 2013.

Solution:

Journal Entry
 Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)
Cash A/c Dr.
2013 Discount Allowed A/c Dr. 14,000
15,000
Aug, 8 To Ram 1,000
(Cash received and discount allowed)

Cash Account

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013
To Ram 14,000
Aug, 8

Discount Allowed Account

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013
To Ram 1,000
Aug, 8

Ram’s Account

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

By Cash A/c
2013 14,000
2013 By Discount
Aug, 8 1,000
Allowed A/c

Example 3: Given some Cash Book entries Post them into ledger Accounts.

Particulars Cash Bank Particulars Cash Bank

Date L.F Date L.F
Vr. (Rs.) (Rs.) Vr. (Rs.) (Rs.)
2013 2013 By Purchase
To Capital A/c 40,000 - 5,000 -
Jan, 1 Jan, 12 A/c
Jan,
To Cash A/c C - 10,000 Jan, 15 By Bank A/c C 10,000 -
15
Jan.
Jan, 25
 22 To Cash A/c 3,000 - By Sumit - 4,500

Jan, By Balance
To Anil - 2,900 Jan, 31 28,000 8,400
28 C/d
43,000 12,900 43,000 12,900

Solution:

· 15th Jan. entry will not be posted (Contra Entry).

· Closing Balance will not be posted in the ledger.

Capital Account

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 Jan,
By Cash A/c 40,000
10

Sales Account

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 Jan,
2013 By Cash A/c 3,000
22

Anil’s Account

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 Jan,
By Bank A/c 2,900
28
Purchase Account

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013
To Cash A/c 5,000
Jan, 12

Sumit’s Account

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013
To Bank A/c 4,500
Jan, 25

Example 4:

Purchase Book

Details Total Amt

Date Particulars Inv. No. L.F.
(Rs) (Rs)
2013 June
Sahil & Co.
4
Geeta Industries 20,000
June 14 16,000
Less: Trade Discount 20% (4,000)
Vijay & Co. 12,000
June 26 9,600
Less: Trade Discount 20% (2,400)
June 30 Purchase A/c Dr. 35,600

Solution:

Purchase Account

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 To Sundries as
36,600
Jun 30 per Purchase
 Book

Sahil & Co.

Dr. Cr.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 Jun
By Purchase A/c 10,000
4

Geeta Industries

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 Jun
By Purchase A/c 16,000
14

Vijay & Co.

Date Particulars J.F (Rs.) Date Particulars J.F. (Rs.)

2013 Jun
By Purchase A/c 9,600
26

Problem 1: Enter the following transactions in proper Subsidiary Books, post them into
Ledger Accounts, balance the accounts and prepare a Trial Balance, 2013

Jun.1 Assets : Cash in hand Rs. 50,000; Debtors : Amit and Co. Rs. 15,000, Sumit Bros, Rs.
30,000, Stock Rs. 1,75,000, Machinery Rs. 1,20,000, Furniture 40,000.

Liabilities : Bank overdraft Rs. 33,000, Creditors : Viral and Co. Rs. 24,000, Vishal Rs. 16,000.

Jun. 2 Purchased from Ramesh and Sons goods of the list price of Rs. 20,000 at 10% trade
discount.

Jun. 5. Returned to Ramesh & Sons goods of the list price of Rs. 2,000.

Jun. 10 Issued a cheque to Ramesh and Sons in full settlement of their account.

Jun. 12 Solid to Amit and Co., goods worth Rs. 25,000.

Jun. 15 Received cash Rs. 10,000 and cheque for Rs. 8,000 from Amit and Co. The cheque was
immediately deposited into the bank.

Jun. 16 Withdraw for personal use cash Rs. 5,000 and goods for Rs. 3,000. Jun. 19 Sold to
Mohit Bros., goods for Rs. 16,000.

Jun. 20 Cash purchases Rs. 15,000.

Jun. 22 Withdraw from bank for office use Rs. 10,000. Jun. 23 Purchased from Vishal goods
valued Rs. 24,000. Jun. 24 Amit and Co. returned goods worth Rs. 2,000. Jun. 25 Received
from Mohit Bros. Rs. 10,000.

Jun. 27 Paid by cheque, Rent Rs. 2,800.

Jun. 27 Received Commission in Cash Rs. 800. Jun. 30 Paid salaries Rs. 5,000.

Solution:

Cash Book (with cash and Bank Columns)

Particulars Cash Bank Particulars Cash Bank

Date L.F Date L.F
Vr. (Rs.) (Rs.) Vr. (Rs.) (Rs.)
2013 *To Balance 2013 *By Balance
5,000 - - 33,000
Jun 1 b/d Jun 1 b/d
By Rames &
Jun 15 To Amit & Co. 10,000 8,000 Jun 10 - 16,200
Sons
By Drawing
Jun 22 *To Bank A/c C 10,000 - Jun 16 5,000 -
A/c
To Mohit By Purchase
Jun 25 10,000 - Jun 20 15,000 -
Bros. A/c
To
Jun 27 Commission 800 - Jun 22 *By Cash A/c C - 10,000
A/c
Jun 27 By Rent A/c - 2,800
By Salaries
Jun 30 5,000 -
A/c
 Jun 30 To Balance - 54,000 Jun 30 By Balance 55,800 -
c/d c/d
Total 80,800 62,000 Total 80,800 62,000
By Balance
To Balance c/d
July 1 55,800 - July 1 - 54,000
b/d (Bank
overdraft)

Example 5:

Trail Dr. Balance (Cr. Posted to the Suspense A/c?

S. No. Difference (Rs.)
Total Rs. Total) (Rs.) (Debit side of Suspense A/c)
8,500
1. 2,25,00 2,16,500 Credit Side of Suspense A/c
(Ecess Debit)
8,500
2. 2,16,500 2,25,000 Debit Side of Suspense A/c
(Ecess Debit)

Solution:

Closing of Suspense A/c

· The errors which led to the difference still remain to have to be located.

· These errors will be rectified through Suspense A/c (One sided errors) which will be
explained in the topic Rectification of Errors.

· When all the errors are rectified, this Account closes down automatically. If the difference
in Trial Balance persist, it is shown in the Balance Sheet.

(a) Debit Balance of Suspense Account is shown in the Asset Side of the Balance Sheet.

(b) Credit Balance of Suspense Account is shown in the Liability Side of the Balance Sheet.
 Preparation of bank Statement

Example 1: Balance as per Cash Book is given

Prepare Bank Reconciliation statement as on 31st July 2013

(1) Dr. Balance as per Cash Book is Rs. 20,000 as on 31st Jul 2013.

(2) Cheques for Rs. 5000 were deposited into the Bank in the month of July but only
Cheques for Rs. 1000 were credited by bank till 31st July 2013.

(3) Cheques issued for Rs. 33000 in July, out of which a cheque for Rs. 13,800 was
presented for payment on 3rd August, 2013.

(4) Bank charged Rs. 150 as Bank charges and credited interest of Rs. 400.

(5) A customer directly deposited Rs. 2,500 in firm’s bank A/C.

(6) Bank paid the insurance Premium of Rs. 1200 as per standing instruction on
25.7.2013.

Solution :

Bank Reconciling Statement as on 31st July 2013

PARTICULARS + ITEM - ITEM

1. Balance as per Cash Book 20,000 -
2. Cheques deposited but not yet collected by
- 4,000
the bank (5.000-1,000)
3. Cheques issued but not yet Present for
13,800 -
payment
4. (a) Bank. Charges
- 150
(b) Interest credited by the bank
5. Directly deposited by the customers not
2,500 -
 recorded in the Cash Book
6. Insurance Premium paid by the bank not
- 1,200
recorded in Cash Book.
TOTAL 36,700 5,350
Balance as per pass Book (36,700-5,350) 31,350

Example 2 : When overdraft as per Cash Book is given

1. Overdraft as per Cash Book is Rs. 40,500 on 30th June 2013.

2. Cheqes deposited but not yet collected Rs. 12,000.

3. Cheqes issued but not yet presented for payment of Rs. 2,800.

4. Bank Charges of Rs. 50 and Interest on overdraft of Rs. 250 are charged by the bank.

5. A customer directly deposited Rs. 1,200 into the Bank.

6. Insurance Premium of Rs. 1,500 is paid by the bank as per standing instructions

Solution :

Prepare Bank Reconciliations Statement for the month of June 2013.

Bank Reconciliations Statement as on 30the June 2013

PARTICULARS + ITEM - ITEM

1 Overdraft as per Cash Book*. - 40,500
(2) Cheques deposited but not yet collected - 12,000
(3) Cheques issued but not yet Presented for
2,800 -
payment
(4) (a) Bank Charges - 50
(b) Interest on overdraft charged - 250
(5) Directly deposited by a customer in the bank 1,200 -
(6) Insurance Premium paid by the bank not
entered — in Cash Book. - 1,500
 TOTAL 4,000 54,300
Balance as per pass Book (54,300-4,000) - 50,300

Example 4: Overdraft as per Pass book is Rs. 45,000 Rest of the contents (points 2 to 6)
are same as given example No.2

Solution :

Prepare Bank Reconciliation Statement as on June 30, 2013.

Bank Reconciliations Statement as on 30th June 2013

PARTICULARS + ITEM - ITEM

1 Over draft as per Pass Book. - 45,000
(2) Cheques deposited but not yet collected 12,000 -
(3) Cheques issued but not yet presented for
- 2,800
payment
(4) (a) bank Charges not entered in Cash Book 50 -
(b) Interest on overdraft charged by the bank 250 -
(5) Directly deposited by a customer in the Bank - 1,200
(6) Insurance Premium paid by the Bank 1,500 -
TOTAL 13,800 49,000
Balance as per pass Book (49,000-13,800) - 35,200

Example 5: The cash Book of Mr. Sharma showed a balance, of 3,560 as on 31st Dec. 2013
at the bank where as Pass Book showed a balance of Rs. 4,230. Comparison of the Cash
Book and Pass Book revealed the following:

(1) The Bank has debited Mr. Sharma With Rs. 460, the annual premium of his life
Policy according to his standing instructions and Rs. 20 as Bank charges.

(2) Mr. Sharma paid into the Bank cheques totaling Rs. 3,100 on Dec. 26, 2013 of which
those for Rs. 2,500 were collected in December. One cheque for Rs. 200 was returned
dishonored on 2nd Jan. 2014.

(3) The Bank has credited Mr. Sharma by Rs. 1,600, the proceeds of a bill.
(4) Cash collected, on 31st Dec. 2013 totalling Rs. 850 was entered in the Cash Book in
the Bank column on the same date but banked on 2.1.2014.

(5) Mr. Sharma issued cheques totaling Rs. 2,300 in the month of Dec. out of which
cheques for Rs. 1,000 have not been presented for payment for payment till 31st Dec.

Solution :

Amended Cash Book (Bank Column only) as on 31st Dec. 2013

Receipt side Receipt side

Particulars Rs. Particulars Rs.

Top Balance b/d 3,560 By Drawings 460
To B/R (Proceeds of a Bill) 1,600 By Bank Charges 20
By Balance c/d/ 4,680
5,160 5,160

Bank Reconciliation Statement

PARTICULARS + ITEM - ITEM

1 Balance as per Adjusted Cash Book (Dr.) 4,680 -
(2) Cheques paid into the Bank but not Credited by
- 600
Dec. 31, 2013 (3,100-2,500)
(3) Cash collected entered in the Cash Book but not
- 850
banked
(4) Cheques issued but not presented till date 1,000 -
TOTAL 5,680 1,450
Balance as per pass Book (5,680-1,450) 4,230 -